BoC warning on consumer debt

"The growth of household credit has shown signs of moderating in recent months," BoC Deputy Governor Timothy Lane said in a speech at Harvard. "If (the new mortgage rules) turned out to be insufficient, monetary policy could also be used, within a flexible inflation-targeting framework, as a complementary instrument to address financial imbalances.”But so far that intervention hasn’t been necessary, he said.In fact, while momentum in house price growth, sales of existing homes, and new construction has moderated, so too has the pace Canadians continue to rack up new debt, in general.Last month, the central bank cited “a more constructive evolution of imbalances in the household sector” as a key reason for holding its Overnight rates steady at 1 per cent.Still, more recent data suggests that Canadians may once again have accelerated the accumulation of new debt in December.But the BoC has no immediate plans to lift its overnight rate, ostensibly because the economy is simply too fragile for the removal of that stimulus.For property investor, with both the means and the prospects, purchases are likely to go ahead at the same low interest rates that have marked the last two years of the market.Still, for landlords, in particular, the BoC holding pattern is neither expected to increase or decrease the current vacancy rates, already in their favour.